FedEx is gearing up to manage a surge in parcels from Amazon as the it shifts more of its logistics volume to third-party carriers — a move poised to reshape the U.S. parcel market and bolster FedEx’s growth heading into peak season.

Chief customer officer Brie Carere said Amazon’s volumes were “minimal” during the fiscal first quarter as planned, with full onboarding expected by the third quarter. The new business will skew toward larger, heavier-weight packages—more profitable shipments that fit FedEx’s network strategy—and is expected to lift U.S. domestic revenue growth through the holiday peak. Carere said the company anticipates a modest increase in average daily package volume during peak season and a mid- to high single-digit increase in total peak shipments, driven by big B2C customers like Amazon.

The deepening relationship marks a notable turn for FedEx, which ended its air and ground delivery contracts with Amazon in 2019 amid competitive tensions. Since then, Amazon has built out its own logistics network but still relies on third-party carriers for a share of its U.S. parcel flow, particularly during peak periods. The renewed partnership underscores FedEx’s push to win back high-volume e-commerce business while keeping strict controls on pricing and profitability.

The Amazon ramp comes as FedEx posted stronger-than-expected fiscal first-quarter results. Revenue rose 3% to $22.1 billion from $21.5 billion a year earlier, while net income climbed 6% to $1.0 billion from $945 million. Adjusted earnings increased to $3.83 per share, up 6% year over year. Executives said cost reductions, network streamlining, and targeted growth in high-value verticals helped offset soft global trade, the expiration of the United States Postal Service contract, and continued industrial-sector weakness.

CEO Rajesh Subramaniam said Federal Express Corp. (FEC) revenue rose 4% and adjusted operating income jumped 17%, marking its fourth straight quarter of margin expansion. By contrast, FedEx Freight continued to see lower shipments and profit, though FedEx said its planned spin-off of Freight remains on track for June 2026. The less-than-truckload business will become a standalone publicly traded company listed as FDXF, with a dedicated investor day planned for spring 2026.

FedEx is also pressing ahead with its Network 2.0 consolidation initiative, with about 360 U.S. and Canadian stations now optimized to manage three million daily packages. Its “Tricolor” strategy—integrating express, ground, and third-party networks—is cutting unit costs and allowing FedEx to shift air capacity toward profitable Asia-to-Europe lanes as China-to-U.S. export demand wanes. The company has cut transpacific air capacity by 25% year over year.

Subramaniam also spotlighted FedEx’s push into data-driven logistics, naming Vishal Talwar as chief digital and information officer and president of FedEx Dataworks. Talwar, formerly chief growth officer at Accenture Technology, is tasked with scaling AI across the enterprise and monetizing FedEx’s trove of logistics data.

FedEx reaffirmed its full-year forecast for on 4%–6% revenue growth and $1 billion in cost savings. Executives said the combination of the Amazon volume ramp, network transformation and pricing discipline positions the company to drive growth even as trade headwinds and industrial-sector weakness persist.

Sign up

Sign up for a complimentary subscription to Digital Commerce 360 B2B News. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at mark@digitalcommerce360.com. Follow him on Twitter @markbrohan. Follow us on LinkedIn, X (formerly Twitter), Facebook and YouTube.